Not all 401(k)s are Equal.

I was just reading an article on MarketWatch about how Visa is going to start offering 200% matching on 401(k) plans up to 5% of base pay. That’s an instant $2 return on your $1 investment! For non-money nerds this may not sound like much… but it’s a pretty big deal.

Count your 401(k) into Your Salary

When people are looking for a job they consider several things. Salary, health insurance, work-life balance, etc. But most people don’t really consider the 401(k) plan. This is really unfortunate because the 401(k) should be looked at as part of your salary, and if you stop to do the math you’ll realize it makes a difference.

The Math may Shock you

I calculated a few scenarios below based on a $50,000 salary. Here’s the breakdown: If you work somewhere with no 401(k) match and save 10% a year, you’ll have about $500,000 in 30 years. Pretty good right? But if you work somewhere that offers a 100% match on the first 6%, you will have over $800,000. And if you work somewhere super competitive like Visa, that offers 200% on the first 5%, you will have over $1,000,000. That’s $500,000 more dollars at retirement; even though you invested the same. That’s smart thinking.

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